Where the Wealthiest Americans Live and How It Can Guide Multifamily Investment Strategy

Understanding where the wealthiest Americans live in the U.S. isn’t just about tracking luxury real estate. It’s a key indicator for multifamily investors looking to identify growing submarkets, rising rental demand, and untapped opportunities in Class B properties.

While the ultra-rich dominate high-end markets, their influence spills over into surrounding areas, creating demand for more affordable yet well-located housing. Investors who recognize this trend can position themselves one step ahead of the market.

Where Are the Wealthiest Americans Concentrated?

Certain cities have consistently remained hubs for high-net-worth individuals (HNWIs), driving both luxury and secondary market growth:

Top Wealth Hubs in the U.S.

• New York City, NY – Home to 349,500 millionaires and the world’s financial center.

• San Francisco Bay Area, CA – Fueled by Silicon Valley’s tech boom and the highest concentration of high-income workers.

• Seattle, WA – A growing tech and business hub with 54,200 millionaires.

• Miami, FL – Attracting a surge of wealthy transplants, particularly from high-tax states.

• South Florida (Palm Beach, Naples) – A rising hotspot for business moguls, celebrities, and tech investors.

• Scottsdale, AZ – A rapidly growing luxury market with rising rents pushing demand to nearby cities.

• Dallas-Fort Worth, TX – A thriving metro for corporate relocations and steady job growth.

But here’s the real opportunity: investing in the secondary markets near these cities, where demand from professionals and middle-income renters is rising due to luxury market overflow.

How Luxury Real Estate Signals Class B Investment Potential

1. Follow the "Wealth Overflow" Effect

High-end real estate attracts executives, entrepreneurs, and professionals, but not everyone working in these areas can afford to live there. This creates demand for high-quality, more affordable housing in nearby submarkets.

• Miami → Strong demand in Doral, Kendall

• Scottsdale → Rising rents fueling demand in Phoenix, Mesa, and Gilbert

• Nashville → Growth in Murfreesboro, Hendersonville

• San Francisco → Expanding to Oakland, Walnut Creek

• Dallas-Fort Worth → Demand increasing in Addison, Plano, and Richardson

Investor Insight: Track luxury migration patterns and look one or two submarkets away for well-located Class B properties with strong rental potential.

2. Track Infrastructure & Commercial Development

When wealth moves into an area, it brings infrastructure, business growth, and high-end retail with it, all of which impact real estate demand across income levels.

Look for: 

• New transit projects connecting to high-income neighborhoods 

• Corporate relocations bringing high-salary jobs (think Tesla, Oracle in Texas) 

• Luxury retail developments (Whole Foods, Equinox, Apple stores = signs of affluence)

Dallas-Fort Worth & Addison, TX:

• DFW is one of the top U.S. metros for corporate relocations, fueling multifamily demand.

• Addison, just north of Dallas, is positioned as an attractive alternative to Uptown and Downtown Dallas. With a balance of affordability and luxury amenities, rental demand is growing steadily in Addison due to its thriving business district and proximity to major employment hubs.

Investor Insight: These factors drive up home values and rents before Class B pricing catches up. Get in early while affordability remains.

3. Migration & Tax Trends (Why Investors Should Pay Attention)

HNWIs aren’t just moving for fun—they’re making tax-efficient investment decisions. This creates economic ripple effects that benefit multifamily investors.

• Florida & Texas: No state income tax → Surge of wealthy individuals relocating 

• Tennessee: Business-friendly environment → Nashville’s booming tech and healthcare industries 

• Arizona & Wyoming: High-net-worth migration → Scottsdale & Jackson Hole seeing sustained luxury growth

  
  

Investor Insight: Luxury migration creates demand across price points—especially in Class B multifamily properties where middle-income workers land.

4. Watch for the "Priced-Out Renter" Phenomenon

When luxury home prices and Class A rents skyrocket, middle-income renters start looking for affordable, quality alternatives.

For example:

• Scottsdale’s rising rents → Driving demand in Phoenix, Mesa, and Gilbert

• San Diego’s rent spikes → Expanding demand to Chula Vista, El Cajon

• Dallas’ increasing luxury housing costs → Boosting demand in Addison, Plano,  Richardson, and Irving

Investor Insight: If luxury rents are 2x higher than Class B, expect upward pricing pressure on Class B as renters get priced out.

5. Watch Luxury-to-Class B Rent Ratios

If Class A apartments rent for 2x more than Class B, it’s a strong sign that Class B is undervalued and will likely experience rent growth.

Example:

• Scottsdale Class A: $3,500+ per month vs. Phoenix/Mesa Class B: $1,800 → Strong rent growth expected

• Dallas Class A: $3,500+ in Uptown vs. Addison/Plano Class B: $2,200 → Demand increasing

Investor Insight: Compare luxury rents to Class B pricing. If the gap is too wide, Class B will likely see increasing demand and rent appreciation.

Final Thought: Luxury Real Estate as an Early Indicator

For investors focused on Class B multifamily, luxury real estate isn’t just about expensive homes, it’s an early signal of migration, economic growth, and rising rental demand.

• Track where wealth is moving. 

• Look 1-2 submarkets away for affordability gaps. 

• Pay attention to infrastructure, job growth, and Class A-Class B rent ratios.

By staying ahead of these trends, investors can position themselves in high-growth areas before demand peaks.

P.S. If one of your priorities, like mine, is building and preserving your wealth through multifamily real estate investments, click here to download my new eBook: The Ultimate Guide to Creating & Preserving Your Wealth.

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About Ellie Perlman

Ellie Perlman is the founder of Blue Lake Capital, a commercial real estate investment firm specializing in multifamily investing throughout the United States. At Blue Lake Capital, Ellie partners with both institutional and individual investors to grow their wealth by achieving double-digit returns by investing alongside her in exclusive multifamily deals they usually don't have access to.

A defining factor of Blue Lake Capital’s strategy is founded in utilizing machine learning/artificial intelligence throughout the course of all acquisitions and asset management. This advanced technology enables the company to produce accurate and data-driven forecasting for all assets on a market, property, and even tenant basis. In doing so, Blue Lake is able to lead commercial investments with the full capabilities of today’s technology.

Ellie is the founding host of REady2Scale, a podcast that highlights the assets, processes, and strategies for the multiple approaches to successful real estate investing.

She started her career as a commercial real estate lawyer, leading real estate transactions for one of Israel’s leading development companies. Later, as a property manager for Israel’s largest energy company, she oversaw properties worth over $100MM. Additionally, Ellie is an experienced entrepreneur who helped build and scale companies by improving their business operations.

Ellie holds a Masters in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.

You can read more about Blue Lake Capital and Ellie Perlman at www.bluelake-capital.com.

*The content provided on this website, including all downloadable resources, is for informational purposes only and should not be interpreted as financial advice. Furthermore, this material does not constitute an offer to sell or a solicitation of an offer to buy any securities.